Mortgage Express assets sold in £11.8 billion Bradford & Bingley deal

by Property 118

10:58 AM, 31st March 2017
About 2 years ago

Mortgage Express assets sold in £11.8 billion Bradford & Bingley deal

Make Text Bigger
Mortgage Express assets sold in £11.8 billion Bradford & Bingley deal

UK Asset Resolution (UKAR) has today confirmed the sale of two separate Bradford & Bingley asset portfolios comprising performing Buy to Let loans for a total of £11.8 billion to Prudential plc and to funds managed by Blackstone.

Non-performing loans are where a scheduled mortgage payment has not been made for more than 90 days.

UKAR have confirmed the sale is based on the portfolio position as at 30 September 2016, from which point the buyers will acquire the risks and rewards of ownership of 104,000 loans originated by Bradford & Bingley and Mortgage Express.

It has been confirmed under treating customers fairly that terms and conditions for any Buy to Let mortgages sold will not be changed and that borrowers do not need to take any action and all affected customers will be contacted in due course to outline details concerning the change of ownership.

Chancellor Philip Hammond said, “The sale of these Bradford & Bingley assets for £11.8 billion marks another major milestone in our plan to get taxpayers’ money back following the financial crisis.

“We are determined to return the financial assets we own to the private sector and today’s sale is further proof of the confidence investors have in the UK economy.”

The sale includes repayment of £10.9 billion to the Financial Services Compensation Scheme of the £15.65 billion borrowed by the group and it is planned that a later sale of mortgage assets in March 2018 will repay the remainder.

UKAR CEO, Ian Hares said, “This sale of assets is a significant milestone in the phased repayment of the FSCS loan extended to Bradford & Bingley and when complete will reduce UKAR’s balance sheet to £22bn from £116bn in 2010 when it was formed. We are very pleased with the price achieved which delivers excellent value for the taxpayer. The transaction delivers against our overarching objective to develop and execute divestment strategies which protect and maximise value for the taxpayer whilst treating customers fairly.”



Comments

Mark Walker

12:09 PM, 31st March 2017
About 2 years ago

It's like a scene from 'The Big Short'. ...Mortgage Backed Securities at play in the open.

Arnie Newington

15:22 PM, 31st March 2017
About 2 years ago

The Nationalisation of Bradford and Bingley and Northern Rock has got to be the biggest theft ever.

At 30/09/2016 UKAR had 36 Billion of Assets and 28 Billion of liabilities (including 27 Billion of Govt. loans) with 8 Billion of shareholder funds.

http://www.ukar.co.uk/~/media/Files/U/Ukar-V2/Attachments/press-releases/2016/ukar-interim-report-2016.pdf

Now following this transaction UKAR will have 26 Billion of Assets and 16 Billion of liabilities (including 15 Billion of Govt Loans) and 8 Billion of shareholder funds.

Contrary to the nonsense spouted by the main stream media it is unlikely that there will be any loss on the loans provided by the Govt. and the 8 billion of shareholders funds represents the money that was stolen from the former shareholders of Bradford and Bingley and Northern Rock.

Caroline Humphrey

8:47 AM, 1st April 2017
About 2 years ago

Mortgage express have treated me appallingly when I have been ill with cancer sending relationship managers round to spy on me and gain information, then lie about my situation in an attempt to gain control Plus dreadful bullying tactics and underhand dealings and much much worse. Can you tell me is the Prudential going to try to undo the damage that mortgage express has done to the customers and their assets, now they have taken over? Who would I contact regarding the disgraceful behaviour of Bradford & Bingley to myself and other customers I know of? The article mentions people being treated fairly which they undoubtedly have not been. Now the Prudential have purchased this portfolio are they going to treat their customers fairly and who do we speak to about Bradford & Bingleys disgraceful management? I would be interested to know who else has been treated badly by Mortgage Express and Bradford & Bingley in their haste to sell assets which in effect belong to the taxpayer. Please comment

Darren Peters

19:25 PM, 1st April 2017
About 2 years ago

Correct me if I'm wrong in my thinking, UKAR has a duty to get the most money back for the UK govt/taxpayer. If it sold the performing loans book at less than 100% of its net present value without giving the individual borrowers the opportunity to better the offer then they have not performed their duty.

It's not like it would be an expensive administrative task. A bulk mailing to every borrower stating:
We are in receipt of an offer of 45p in the pound (or whatever) for the remainder of your outstanding loan. If you make a payment of £X (equal to 55p in the pound on your outstanding loan) within the next 30 says we will accept that as full and final settlement on your mortgage account.

Monty Bodkin

10:24 AM, 2nd April 2017
About 2 years ago

Reply to the comment left by "dp1 Django" at "01/04/2017 - 19:25":

I've wondered about this too.
No idea why UKAR didn't negotiate with borrowers to settle loans early. Their approach was all stick and no carrot. Perhaps it was too politically sensitive?
Maybe Prudential/Blackstone will make some offers. A good opportunity for them to make a quick buck.
55p in the £ might be a bit optimistic though!

Glenn Ackroyd

17:05 PM, 2nd April 2017
About 2 years ago

Any discount that's been achieved will be on the basis of the value to compensate for the low interest on the book payable on loans due to mature in 15 years or less. Most deals were 1.75% above base - So they're currently only getting 2% interest - Whereas a standard BTL mortgage book would get them double that.

If the average mortgage has 10 years to run, 2% year on year opportunity loss, compounded, with a net present value calculation for inflation might mean a discount of 30-40%.

Darren Peters

22:24 PM, 2nd April 2017
About 2 years ago

Reply to the comment left by "Glenn Ackroyd" at "02/04/2017 - 17:05":

So not getting best value for taxpayer on 2 levels.
1) borrower wasn't given opportunity to better the discount
2) borrowers will nearly all be taxpayers

Monty Bodkin

16:55 PM, 3rd April 2017
About 2 years ago

Reply to the comment left by "Glenn Ackroyd" at "02/04/2017 - 17:05":

If the average mortgage has 10 years to run, 2% year on year opportunity loss, compounded, with a net present value calculation for inflation might mean a discount of 30-40%

They could have sold most of them to borrowers for half that -but it would have been politically unpalatable.

Instead of soundbites like;
"Another major milestone in our plan to get taxpayers’ money back"

It would have been;
"Government gives thousands of £'s of taxpayers' money to greedy landlords".

The end result may still be the same for borrowers though with Pru/Blackstone offering early redemptions at a discount (and pocketing a hefty profit).

Bank of Ireland were offering borrowers 6.5% discount for redeeming similar loans.

winnie gordon

12:05 PM, 5th August 2017
About A year ago

Reply to the comment left by Monty Bodkin at 03/04/2017 - 16:55Has any MEX borrower received a 'notice of assignment'?
How do you know if your loan is one of the ones sold?
Regarding discounts; has anyone tried making an offer to UKAR to pay off early for a discount?
I remember reading about a guy on here who was supposed to be able to negotiate a discount for a fee. What happened to him?
If you want to make an offer to Blackstone/PRU, who do you contact?

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

Nottingham lose £95k appeal against landlord

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More